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Old 11-12-2019, 08:17 PM
 
Location: Carmichael
1 posts, read 1,205 times
Reputation: 10

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We are married and both work for the government in downtown. We make about about 185k before taxes annually and have 810+ credit score. We don't have any student loans and debt free as we speak having an estimated savings of about 200k for the house. We were planning to get a house around 450k-650k. I was looking at brand new houses by Lennar in Rancho cordova(Elk grove school district) and Folsom. Since there is almost 200k difference for the same size and sqft, I am getting nervous if

1) If we should buy in Folsom or Rancho cordova considering things going on with economy and news and editorials hinting housing market crash in 2020?
2) We are both 30 yrs old and plan to have kids next year so still 6 more years before we really need an excellent school district. So, should we go with cheaper one in Rancho and later move to Folsom or go directly to Folsom if we think financially and resell prospects?
3) I noticed Rancho has Mello roos of $327 every month but didn't see that for Folsom? Is it state wide?
4) Also, the Rancho property is near Douglas Rd and Sunrise blvd and folks at work keep asking if its near to Anatolia? When I researched that, found there is a Kiefer Landfill which is about 3.7 miles away. Is it a big con for resell?
5) Any suggestions for the first time buyer if you were in our shoes?

Thanks a lot and I hope to get some suggestions from experienced users here.
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Old 11-12-2019, 11:25 PM
 
1,614 posts, read 1,455,139 times
Reputation: 1426
I would rent. Housing prices have momentum.

With the stock market how well the stock market does today does not predict how well the stock market will do tomorrow. You also can't predict how well the stock market will do next week or next month or even next year by how well the stock market does today. The stock market doesn't have momentum.

With housing prices generally how prices are doing today are pretty good predictors of how well housing prices are doing next week, next month and even next year.

If you look around it looks like housing prices are starting to change. We might be at an inflection point. Inventory is slowing and prices seem to be dropping.

That matters because when you buy a house you are buying it with a lot of leverage. Lets say you buy 500K home with 20% down and next year prices fall by 10%. So you house next year is worth 450K. But because leverage is working against you, your equity has dropped from 100K to 50K for a negative 50% on equity. Now housing prices may not fall by 10% next year, but what ever you think they might fall by, multiply that by the degree of leverage you are using to figure out your return on equity.

You and your husband are making a lot more money than the average family in Sacramento. Congratulations. So the two of you probably can afford to buy when a lot of others are being priced out, but that doesn't mean that you should buy right now. In general I think the biggest advantage that state employees have, is that they have a solid income when other people's incomes are dropping during a recession. In the past the ratio of the average housing prices in Sacramento to the average family income has dropped to just above 3 see June 2012 below and it does that in recessions.

https://www.deptofnumbers.com/afford...ia/sacramento/

But right now we are closer to 6

https://www.citylab.com/equity/2018/...-whack/561404/

That means that housing price levels are probably about twice what they would be if you were buying in a recession. So if it were me, and both you and your spouse worked for the government. I would rent somewhere cheap and just wait for the recession to hit and buy housing in Sacramento when its on sale. Your family income is not going to drop much, but the income of the people you are bidding against probably will see their incomes fall during a recession. So instead of buying in Rancho now, you maybe buying in El Dorado Hills or Granite Bay later.

As for your concerns about Anatolia, I think the bigger issue then the landfill is actually a rendering plant where the smell occasionally gets blown into Anatolia.

https://www.abc10.com/article/news/l.../103-460924221
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Old 11-13-2019, 01:45 PM
 
Location: I'm around town...
735 posts, read 1,725,434 times
Reputation: 933
I think commuting is for the birds, so if I were you I'd look in Land Park, South Land Park, Pocket, Greenhaven instead. Sac City USD has several great neighborhood schools in those areas as well as other school options like Birney, SES, DaVinci, etc.
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Old 11-13-2019, 02:21 PM
 
470 posts, read 634,941 times
Reputation: 1028
I agree with Adriatica to a certain extent. South Land Park, Greenhaven, and parts of the Pocket would be very nice places to live, and provide easy commutes. I can't comment on a SCUSD school in particular, rather, my comment is on SCUSD as a whole. Simply put, it's a mess. Tens of millions in the hole year after year, teachers who don't know if they'll have a job next year. I know two teachers in SCUSD who are looking to jump ship and head to the 'burbs. There's a reason why SCUSD kids test well below those in RJUHSD, LUSD, and FCUSD (Roseville, Lincoln, Folsom).

If schools are going to be your number one priority within 6 to 10 years then I would not look at Rancho Cordova or Anatolia. I've known people who lived out there, Anatolia was supposed to be this great suburb of Sacramento, then the housing downturn happened, and the place was filled with people looking for cheap housing.

I can only speak subjectively as I do not follow local real estate trends, but in my area on the Sacramento County/ Placer line near Roseville, Orangevale, Citrus Heights, I have not seen a downturn in house buying yet. It seems like weekly there is a new home going up for sale and within a week or two it's sold. I did talk with a neighborhood real estate agent who told me that homes are selling right now in my neighborhood for 99. 2% of original asking value.

The other issue though is the Sacramento area and its ridiculous rental prices. Why rent for $2,000 a month when you can have a mortgage for maybe just a few hundred dollars more per month?

Two things to consider, there are new high schools being built in Rocklin and Lincoln as we speak, as well as a new Sacramento State satellite campus in the Rocklin/Roseville area that will hopefully be built within the next 5-10 years. Home prices in these areas will increase quite a lot when these high schools, college, and surrounding area are built. Getting in on the ground floor is an option that might get you instant equity. Also, there is a brand new huge subdivision being built in Folsom on the south side of highway 50. Both Folsom and the Rocklin, Roseville, Lincoln areas provide excellent schools, more modern homes, better opportunity to meet people your age, and better learning environments for your children. The downside is the commute downtown.

What's going to happen to the market is anyone's guess. The president just yesterday floated the idea of a middle class tax cut which would cap most of us at about 15%, that's significantly below the 24% we're taxed right now. In conjunction with the interest rates staying low I don't see this housing market flattening anytime soon, unless Warren or Sanders are elected as president. So, you could wait it out for another year and see what happens, or you could jump in right now and buy for your future. Regardless of what you do, don't move to Rancho Cordova unless you live in Gold River. 30 years ago we derisively called Rancho Cordova Rancho Cambodia, I don't see that much has changed in those last 30 years.
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Old 11-13-2019, 03:47 PM
 
Location: Sacramento
501 posts, read 392,804 times
Reputation: 917
Where do you guys live now? Do you already live out in the suburbs? As has already been brought up - do you really both want to commute in from outer Rancho or from Folsom to jobs downtown? The commute will suck even more if you have kids that you have to pick up from school etc. If you are already used to commuting and happy with it then have it and I'd go for Folsom over Rancho any day.

Honestly - you'll find good and bad teachers in every school district, there's nice kids and crappy kids in every school, good and bad parents etc. For what it's worth I have my kids in SCUSD - I checked out a number of different schools and there's a ton of different styles and philosophies available through the lottery/charter system as well as decent neighborhood schools. There's the Waldorf based ones that Adriatica mentioned, the high academic one in East Sac (Phoebe Hearst), the Montessori ones which have a few different campuses. There are also now International Baccalaureate based programs available at some of the schools as well. So I wouldn't rule out neighborhoods in SCUSD that you might be interested in based on some fear of bad schools for children you haven't even had yet.

As far as when to buy... if you are buying for the long term it probably doesn't matter all that much. Nobody can predict the market -- people have been talking about a downturn for years now. Eventually they will be right and be able to say I told you so! Interest rates are super low. Houses that are fairly priced are still going fast. There does appear to be a flattening of the market but it'll take another year to see whether that is a normal seasonal effect or an actual slowing.

Good luck with your decisions.
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Old 11-13-2019, 09:49 PM
 
61 posts, read 193,722 times
Reputation: 57
Buy where you want to live, explore the neighborhood, find a month to month rental if have to while you are looking.

It would be helpful to hear from you why you are looking at new developments in Rancho and Folsom if you both work downtown? You can access about any area in the Sacramento Area given you income/credit/down, but you want to signup for 1.5-2 hours of commuting a day (at best another 7 hours a week in a car). Is that because you want safety? A big house? Little maintenance ? Good school districts? Good investment?
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Old 11-16-2019, 08:04 PM
 
921 posts, read 917,321 times
Reputation: 438
I work for the state as well downtown and would never want to buy way out in Folsom or Rancho and have to deal with the nasty commute everyday. I would look for a place way closer maybe Natomas, East Sacramento, Land Park or Curtis Park. You make enough to buy a nice place close to downtown easily.
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Old 11-20-2019, 04:19 PM
 
Location: California
22 posts, read 18,847 times
Reputation: 71
Rancho Cordova is not that far of a commute to downtown (15 miles and since you're State employees, you get the subsidy for lightrail), but the traffic has gotten so much worse in the last 10 years, with all the Bay Area transplants moving here! I've lived in the Gold River area for 21 years (great convenient area with good schools, near bike trails, store, shopping and the freeway!) and commuted to Downtown Sacramento for 13 years and now I commute to Natomas. I went to look at those model homes off Sunrise and Douglas you talk about a couple weekends ago. The only things about that area, the freeway is far away, not too many conveniences (well at least they finally built that shopping center on Sunrise/Douglas recently), and the school district is Elk Grove, which is pretty far and I'm not sure if it's the best school district. Mello Roos are taxes for schools in certain areas, they're not all the same. I assume those homes have HOA as well? Folsom is more expensive, but has the lowest crime rate in the state and better schools. Don't be swayed by just wanting to buy something "new" because a new neighborhood's value could change in a matter of years. I bought a "new" home 21 years ago, but our neighborhood quickly went to crap in 10 years, with renters, so you just never know.
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Old 11-21-2019, 06:18 PM
 
921 posts, read 917,321 times
Reputation: 438
Also look at midtown as you can buy a nice place within walking distance of work. If I was blessed to make huge bank of coin like you both do, I'd rather walk to work and not have to deal with parking and the commute or public transit.
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Old 11-22-2019, 11:42 PM
 
Location: California USA
1,291 posts, read 744,016 times
Reputation: 376
Sacramento-main concerns are school and crime. Some neighborhoods have access to good elementary and middle schools. However I'm not aware of a public high school within Sac Unified that is academically equivalent to the better public high schools in Elk Grove or Folsom. Crime varies from neighborhood to neighborhood so check the crime maps available on the Sac County Sheriff Dept. website.

Folsom-low crime, good schools-elementary, middle, and high schools.

Rancho Cordova- I wouldn't purchase a home north of Douglas Road because of the schools. With the exception of Somerset Ranch, the new developments feed into the Elk Grove Unified School District (EGUSD). The two k-6 schools are in Anatolia and are solid performers. Anatolia is the oldest development (since about 2005). It also has an HOA, clubhouse and 24/7 security patrol. The newer nearby developments don't so you'll save on the HOA dues.

Here's a link to compare schools in the area...https://www.schooldigger.com/go/CA/z...42/search.aspx

Although I live in Anatolia and am happy I would recommend Folsom. When we purchased our home it was for the long term. When home values fell we didn't feel the pressure to move that others, who didn't plan on buying and staying for the long term, felt. It appears you'd be moving within a few years anyway. If a housing downturn would delay a move for years wouldn't you be content already living in a community that meets all your needs?
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